Not long ago, Rwanda reached a major milestone. The number of foreign visitors coming to this “Land of a Thousand Hills” surged to more than one million per year for the first time.Anyone from abroad might assume these visitors were all tourists coming to see the mountain gorillas, waterfalls, countless bird species or wild orchids.
In reality, a growing number of the people visiting Rwanda are economists, government officials, and development workers coming to see something rarer than a silverback gorilla: a nation that has consistently surpassed hopes and predictions for economic renaissance.
Rwanda has sustained high growth rates, controlled inflation, and reduced poverty over the past generation. And because of its wise use of public funds, it has been able to more than double the share of GDP it spends on development, to above 12 percent, during the past decade.
In the last four years, Rwanda’s ranking in the World Bank’s Doing Business report has leapt above 110 other nations … including all the “BRIC” countries… in terms of ease of doing business. That’s impressive.
And, with the right conditions, Rwanda can do much more, particularly in what some what could “investor after care.” The truly remarkable progress that has been made to date must not serve as a distraction from all the work that still needs to be done.
Private investors are attracted to Rwanda’s low-crime and low-corruption profile as well as its focus on improved education and access to health care.
But they will not commit for the long term unless they have a deep confidence in the country’s governance and judicial systems. In the same way that the government focused on building a friendlier business climate, it should also have a single-minded commitment to sanctity of contracts, visa reforms, predictable tax policy and regulations, and media freedoms.
This week, I am visiting Rwanda for many the same reasons that so many others have come: to learn more about the opportunities to build on the progress of recent years.
As someone who has lived and worked extensively in Africa and spent three months in Kigali in 1992 working with a women’s microfinance institution, I am excited and fascinated by the scale and quality of this recent progress.
For the Overseas Private Investment Corporation (OPIC), Rwanda is both a place where we are actively engaged as well as an inspiration for the work we seek to support around the world.
OPIC, the U.S. Government’s development finance institution has supported multiple projects in Rwanda, helping bring needed private investment into some of the country’s key industries like coffee.
By creating income and opportunity for thousands of people in Rwanda, the projects OPIC has supported are emblematic of the way public-private partnerships support economic growth.
We are eager to support additional development in Rwanda and with the right conditions for investors, we can.
The stakes are high. Rwanda’s key industries-such as mining, tourism, and agriculture-currently provide stable employment. However, 4 out of 10 Rwandans are now under the age of 15, constituting a large youth generation that will soon be looking for work.
One possible way to employ more of them would be to support the growth of the country’s key major industries through partnership with foreign direct investors, who usually bring along training, technology, and assistance accessing markets abroad.
In just one example of the work we have supported in Rwanda, OPIC has helped a U.S. company invest in and modernize equipment for a coffee miller and processor, the Rwanda Trading Company, enabling more small coffee farmers connect with international buyers.
This was a relatively small investment but it has had a far-reaching impact.
Going forward, probably the biggest challenge and the most significant opportunity facing Rwanda – and all of Africa – is limited access to electricity.
In addition to improving the quality of life for millions of Rwandans, more electrical infrastructure will also help attract investment.
Powering Africa is a major focus for OPIC, which over the past decade, has supported more than $1 billion in power projects that have generated electricity both on-grid and off-grid from a variety of resources from solar and geothermal to traditional fuel.
The Agency is playing a key role in President Obama’s Power Africa initiative and hopes to partner with more private investors to bring more reliable sources of electricity to Rwanda and all of Africa.
A World Bank study recently concluded that Rwanda today resembles the so-called “Asian Tiger” economies in the late 1980s and early 1990s, and has a “golden opportunity” to reap a massive economic boon in the coming decades.
Such research does not guarantee success, but it does define the potential height of a very bright future.
UM– USEKE.RW
